🔎 How To Find The Top Performing Crypto Assets

What’s on the Menu 🍴

We’re always on the hunt for the next big trend or investment…

And in today’s Daily Dough, we’re diving into a few ideas in the stock and crypto markets.

Let’s get it!

• How To Find The Top Performing Crypto Assets 🔎

• Can This Yoga Brand Become The Next Nike? 🧘

• What to Watch This Week 👀

Today’s newsletter is a 5 minute read.

How To Find The Top
Performing Crypto Assets 🔎

In December 2023, I told our students the crypto markets were breaking into “altcoin season”.

This is when capital starts flowing from bitcoin into all the other crypto-assets from people looking for gains.

And the past few months have been incredible for memecoins and competing cryptocurrencies.

The only reason to buy an altcoin is to try and get more gains than bitcoin…

And these 11 crypto projects are up over 100% MORE than bitcoin’s gains over the past 30 days:

As an active trader, I’m always hunting for early signs of capital flowing into a project…

Because I know that once get-rich-quick investors see that something is popular, they will typically buy and drive prices higher into bubble territory (which is when I like to sell).

Looking at this gainers list, we can see right away there are a few hot sectors of the crypto market:

• Memcoins - Memecoins are a type of cryptocurrency that originated as internet memes and often experience volatile price swings. (e.g. dogwifhat and Pepe)

• NFT marketplaces - An NFT marketplace is a digital platform where non-fungible tokens (unique digital assets) can be created, bought, and sold. (Ethernity)

We’ve also seen hype around automated market makers, decentralized exchanges, layer 1 protocols, and decentralized file storage.

So, how do we find crypto projects that could explode soon?

Instead of buying projects that are already up massively, we look for coins in hot sectors that are starting to show signs of life:

1. I look at projects that are up big % over the past 24 hours, but haven’t made big moves over the past 30 days yet.

2. Then I look for key resistance levels that could break soon.

3. I set alerts and buy on breakouts

This simple strategy helps me avoid buying tokens that are dying, and gets me in at prices where I can manage risk with stop orders in case the market doesn’t do exactly what I want.

If you want to hunt for the next big crypto gainers with us, check out our Wealth Building Community here.

Can This Yoga Brand Become The Next Nike? 🧘

Athleisure has been one of the largest trends in the past 10 years.

It’s clothing that is multi-functional. It’s athletic and can handle your toughest workouts, yet it’s also extremely usable for everyday wear (and even the office in some cases!).

The interest in the clothing category seems to continue growing worldwide.

Lululemon (Ticker: LULU) has been the fastest growing public athleisure company out there.

They’re coming for Nike’s market share, and they seem to be succeeding.

We recently got Lululemon’s earnings report and they put out a healthy quarter and full year 2023 revenue growth. They grew net revenue at 19% for 2023, which is certainly above typical growth from other major retailers.

Nike’s last quarter showed us basically flat revenue growth year over year (+0.3%).

However, the stock tumbled roughly 17% at the lows because future guidance for 2024 wasn’t as strong as it has been.

Growth for 2024 is projected to be around 11%. Now, this is still above most other retailers.

So, why did the stock tumble? And, what does Lululemon’s future look like? Can they becomes the next Nike?

Lululemon’s valuation was the problem going into earnings. It certainly was a more expensive retail stock.

It had earned that valuation with higher growth vs. its peers (which it still has), but, with lower expected growth, investors simply reacted by shedding shares.

Lululemon is trading at a 28x forward price to earnings multiple. This is above the market’s forward valuation (measured by the S&P 500) of around 20.9.

The good news is Lululemon is on track to grow earnings for 2024 above what S&P 500 earnings growth is expected to be. So, this could justify an above market multiple.

When you compare this to Nike however, which isn’t growing, and trading at a 24x PE, it makes you wonder if LULU could even be a good buy for the long term here.

This begs the question, can Lululemon become as big as Nike?

Like I mentioned, Nike isn’t growing… Lululemon is. Also, Lululemon has started to really encroach on Nike’s bread and butter: Footwear.

This is huge. You have a trusted brand with incredibly loyal customers able to service them from head to toe.

Management has mentioned their push into footwear is showing promising signs:

Moving into footwear alongside international expansion, is the bright spot for Lululemon going forward (even if 2024 shows the consumer slowing down a bit).

Looking out longer term, it’s hard not to see Lululemon continue their foothold in the industry.

They’re moving forward with international expansion in 2024 with 30 more locations: “In 2024, we'll open approximately 30 stores outside of North America, and we will continue with our strategies to increase our brand awareness.”

China mainland grew a whopping 78%, and the rest of the world (ex America) grew 36%. America grew 9% (still healthy considering the consumer slowing down seen by retail sales trends). This is a good sign that international is working. Athleisure as everyday wear is still a newer concept in Asia specifically.

If product and geographical expansion wasn’t enough, they are also winning with their biggest growth opportunity: getting men to buy their products.

They’ve been so successful with this, that their men’s business is actually growing 2% more than their women’s business.

The consumer may be softening in the U.S., but, with a loyal customer and growth levers to pull with men’s, international and footwear, it makes you wonder if LULU could be the next Nike.

There is plenty of market cap to grow here from a long-term view.

Price could be giving us a chance to own a piece of their growth story. The lower the price goes, the more compelling it may be.

So, what are the downsides?

Competition is heating up as more retailers want a piece of the profits.

Lululemon had a first mover advantage, but they’ve got other great brands nipping at their heels now.

The California brand Alo is picking up steam and expanding their physical store footprint. They have very good products. They are a private company for now.

Vuori is another brand that has become very popular. They’re known for their buttery soft joggers and they’re expanding their brick and mortar footprint. They may be IPO’ing this year.

Then, there’s Beyond Yoga which is owned by Levi Strauss & Co (LEVI). They have begun their brick and mortar expansion with 6 locations. Their business grew revenue at 19% last year (their growth is on par with LULU at the moment).

So, it’s not going to be a walk in the park for Lululemon to hang onto market share. However, they have a big step above the rest if they can keep innovating and keep new styles coming into their doors.

Not only that, there could be some acquisition opportunities for Lululemon to keep their reign. Or, their team can simply duplicate some of the fabrics and styles the competition is winning with.

As an athleisure addict myself, and a customer of ALL of these brands, I can also say there is room for everyone to succeed as each brand has its own special strengths.

One thing I do know, is Nike simply has lost its luster and new-age names like LULU and even ONON (On Running Shoes) are coming in hot to attempt to de-throne the great company.

 What to Watch This Week 👀

Last week the stock & crypto markets rallied despite another round of central bank meetings that ended with inaction.

Japan was the one exception, hiking rates back up to 0% from negative territory.

Social media network Reddit enjoyed a successful IPO, and momentum stocks were back in fashion once again.

Not much seems to stand in the way of the market at the moment…

This week we get a lull in earnings releases and the macro calendar is light but does include:

• Australia consumer confidence (Mon)

• Germany consumer confidence (Tues)

• US durable goods orders (Tues)

• France inflation rate (Fri)

• Italy inflation rate (Fri)

• US personal income & spending (Fri)

• China manufacturing PMI (Sun)

Several members of the Fed will be giving speeches this week however, so we’ll be keeping an eye on the market’s reaction to those.

We’ll also have our eye on the following assets & sectors:

📈 Rising Recently:

• Homebuilders (XHB)

• Semiconductors (SOXX)

• Solar (TAN)

• Energy (XLE / XOP)

• Retail (XRT)

• Cannabis (MSOS)

📉 Falling Recently:

• Gold Miners (GDX / GDXJ)

• Real Estate (XLRE)

• Biotech (XBI)

Food For Thought 🧠

“True courage is about stepping up when it’s easier to step aside.”
- Chris Dunn

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.